Transcript Introduction Introduction to Economic Development An

Economic Development
Ethics Training
International Economic Development Council
Washington, DC
PRESENTERS:
DR. JAMES SCHMIDTKE
ASSOCIATE PROFESSOR OF MANAGEMENT
CALIFORNIA STATE UNIVERSITY FRESNO
JANET COE, CECD
ECONOMIC DEVELOPMENT MANAGER
CITY OF ANAHEIM
IEDC Training Session
– Increasing discussion of ethics
– Tools for making ethical decisions
– The IEDC Code of Ethics
– Case studies
Ethics
Dr. James M. Schmidtke
California State University Fresno
Ethical Models
•
•
•
•
Utilitarian
Kantian
Justice Theory
Integrative Social Contracts Theory
Principles of Values Based Reasoning
Utilitarianism
Right action must
maximize overall good,
or good from the
standpoint of the entire
human community
Kantian Deontology
One ought to treat others
as having intrinsic value in
themselves.
One ought only to act such
that the principle of one’s
act could become a
universal law of human
action.
• Universality
• Reversibility
Justice Model
• How equitably are the costs and
benefits of actions distributed?
– Costs and benefits should be equitably distributed
– Rules should be impartially applied
– Those damaged because of inequity or
discrimination should be compensated
• Distributive justice
– Equitable distribution is based on performance
Justice Model
• Procedural justice
– Ensure that people affected by managerial
decisions consent to the decision-making process
– Ensure that the process is administered impartially
• Compensatory justice
– If distributive and procedural justice fail, those hurt
by inequitable distribution of rewards are
compensated
Integrated Social Contracts
Hypernorms
Consistent
Norms
Moral Free
Space
Illegitimate
Norms
Fundamental Paradigms of Right vs. Right
Decisions
• Truth versus Loyalty
• Individual versus Community
• Short-term versus Long-term
• Justice versus Mercy
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Trolley Problem
A runaway trolley is hurtling down the
tracks toward five people who will be
killed if it proceeds on its present
course. You can save these five people
by diverting the trolley onto a different
set of tracks, one that has only one
person on it, but if you do this that
person will be killed. Is it morally
permissible to turn the trolley and
thus prevent five deaths at the cost of
one?
A runaway trolley is hurtling down the
tracks toward five people who will be
killed if it proceeds on its present course.
You are standing next to a large man on a
footbridge spanning the tracks. The only
way to save the five people is to push this
man off the footbridge and into the path
of the trolley. Is that morally permissible?
YES 62%
YES 13%
NO 38%
NO 87%
Ethical Traps: Why Good People Make Bad Decisions
• False Consensus Effect
– Social forecasting
• Unconscious Bias
– Implicit Association Test
• Incrementalism
– Slippery slope of unethical acts
• Incentives
– Unintended Consequences
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Responses to Ethical Dilemmas: Example 1
You are in charge of testing a new software package that your
company has recently developed. It will be launched in a week,
which means you will need to set up round-the-clock testing
before then. You have to assign people to two teams – one
daytime shift and one graveyard shift. You decide to let your
married employees off of the graveyard shift because many of
them have kids.
Q: This undoubtedly shows your sensitivity, but is it ethical?
NO
(%)
DEPENDS
(%)
YES
(%)
Responses to Ethical Dilemmas: Example 2
You notice one of your best employees taking printer paper,
highlighters, and post-it notes home in her laptop bag. This
employee has worked at the firm for many years, but there is a
rule against this and clear procedures for providing employees
with supplies if they choose to work at home. According to
company policy, you are required to fire this employee on the
spot. You decide not to fire her.
Q: Is your decision ethical?
NO
(%)
DEPENDS
(% )
(%)
YES
Responses to Ethical Dilemmas: Example 3
Your department has been going through some tough times, but
your boss has been working on a new project that she believes will
help turn things around. Others in the firm are dubious of this
project (including you), but your boss has already made a decision
to go ahead with it. In the meantime, she asks you to tell others that
no decision has been made. You feel a bit awkward about this
because you may have to lie to other people in the firm. You decide
to follow your boss’s orders.
Q: Is your behavior ethical?
NO
DEPENDS
(%)
(% )
YES
(%)
Breaking it Down by Responses
Shifts
% of
Resp
Supplies
Est. %
Yes
Yes
Depends
Depends
No
No
Lie
Yes
Depends
No
% of
Resp
Est. %
% of
Resp
Est. %
Evidence of False Consensus
100
80
Actual
60
Estimated
Percentage of
Others (Average) 40
20
0
Shifts
Supplies
White Lie
False Consensus

What does false consensus mean?
- Assuming that everybody else has a similar point of view

How about social projection?
- Assuming (when convenient) that others are similar to you and so would
behave like you in similar circumstances

Most of us are unaware that this bias exists.

Some argue that false consensus is more responsible for “unethical” decision
making than any other factor. They result in poor ‘models of the world’
SUPPOSE YOU CONSIDER DOING X TO BE LEGITIMATE
a) False consensus induces a belief that others consider doing x to be legitimate
b) Social projection induces a belief that if you choose to do x then others would
also choose x in the same circumstances
c) Therefore likely to choose x
BUT IF (a) OR (b) IS FALSE, YOU ARE IN TROUBLE!
Unconscious Biases
• Implicit Attitude Test
measures implicit
association of pairing
(e.g., White Good, Black
& Bad; Fair & Nice; Dark
& Nasty, etc.,)
• Measures Implicit Bias
Most individuals have
implicit associations
which leads to
unconscious prejudice.
Source: Banaji et. al.
Incrementalism: Milgram’s Shock Experiment
E – Experimenter
S – Teacher
(Subject)
A – Learner
(Confederate)
Perpetuating Incrementally Bad Behavior
• Start with one minor infraction
– Justified on the basis that it is minor.
• A more serious one seems less serious now that the minor
infraction has occurred.
– Contrast effect + the rule of consistency (if I have done it, it
must not be so bad).
• Slippery slope to un-ethicality
– Boiling Frog Syndrome
– Change Blindness
• Inability to detect changes in environment
• Gradual erosion of others’ ethicality
Source: Gino & Bazerman, 2009
Two Important but Often Ignored
Maxims
• Principiis obsta: Resist the beginnings
– Think carefully about what appear to be small
transgressions from the norm
• Finem respice: Consider the ends
– Think carefully about where a small deviation
today might lead you tomorrow
How to Improve Ethical Decisions
• Establish organizational values
• Integrate them and provide support systems
• Communicate them with organizational
members
• Connect them with policies and decision making
How to Improve Ethical Decisions
• Discuss underlying ethical principles
• Clarify ethical behavior
• Discuss legal issues
• Focus on practical applications
Need to Balance
• Conflicting stakeholder issues
–
–
–
–
Public
Private
Social
Nonprofit
• Issues
– Privacy
– Access to data
– Confidentiality
Decision Making Checklist
• Need to gather information
• Need to consider multiple perspectives
(different ethical models)
• Consider consequences
• Seek input
• Draw your conclusions
• Take Action
Take Away: Ethics
 Leadership is the ability to make tough choices
 Recruiters major complaint about college graduates is their “inability to
make tough choices”, to “take a stand and offer an articulate and
coherent” justification for their choices. Your competitive advantage is
“intellectual depth”.
 Proposes a framework for making tradeoffs
 Utilitarian, Kantian, Justice, Integrated Social Contracts
 Identifying if there is an underlying conflict in core value propositions
helps
 Justice vs. Mercy
 Truth vs. Loyalty
 Individual vs. Community
 Short-term vs. Long-term
Take Away: Ethics
 Watch out for common ethical traps that drive our
behavior in the wrong direction
 False Consensus
 Implicit Biases
 Incrementalism – Slippery slope of ethicality
 Understand company policies and procedures
 Establish personal code of conduct
PROMOTING AN ETHICAL
CULTURE
Three Components
1. Formal Code of Conduct
– IEDC Code of Ethics can be a model
2. Education and training
3. Consequences
IEDC CODE OF ETHICS
IEDC Code of Ethics
1. Act to bring respect to the profession.
IEDC Code of Ethics
2. Display integrity and
honesty both in fact
and in appearance.
Authority
Who is
accountable for
what?
INTEGRITY
Purpose
Principles
What is my
intent?
What I stand
for?
IEDC Code of Ethics
3. Maintain objectivity.
Conducting
Official Duties
with
Bipartisanship
Conflict
of
Interest
IEDC Code of Ethics
4. Represent the community.
Private
Public
Non-Profit
Community
Interest
Social
IEDC Code of Ethics
5. Keep stakeholders informed.
IEDC Code of Ethics
6. Maintain
confidentiality.
Try to Find the Most
Effective Balance
Reporting
Requirements
IEDC Code of Ethics
7. Respect public
records and reporting
requirements.
Try to Find the Most
Effective Balance
Reporting
Requirements
IEDC Code of Ethics
8. Cooperate with peers and improve professional
abilities.
Productivity
Rises
Sharing
Knowledge
and
Information
Efficiency
Goes Up
Respect and
Confidence
in the
Profession
Grows
IEDC Code of Ethics
9. Do not discriminate.
IEDC Code of Ethics
Act Ethically
Think Broadly
Learn
Willingly
Provide
Opportunities
10. Comply with the IEDC
Code of Ethics.
Behave
Respectfully
Teach
Effectively
Professional
Conduct
Ensure
Quality
Asses Fairly
Act
Professionally
Support Peers
Solicit
Feedback
CASE STUDIES
Case Studies
• Groups of 5
• Discuss the case study scenario(s) and
question(s) as a group
• Report back discussion to the entire
audience
Case Study 3: Investing in
Cities where you Work
• Is there a potential conflict of interest here?
• What should Johns next step be, disclosure or
concealment of his investments?
Case Study 7: My Boss Asked Me To
• What course of action should Jane take if
any?
• How could this ethical dilemma have been
avoided?
Case Study 8: Bribe or Finders Fee?
• Is this a bribe or just creative marketing?
• What ethical principles should be adhered
to in economic development marketing?
Case Study 9: Shopping the Project Around
• Has the consultant committed an ethical
breech? If so, what is the proper channel
for censure?
• Should the local economic developer report
the consultant for shopping the project
after the location decision has seemingly
been made by the owner?
Case Study 10: Start-up
Development Company
• Is there an ethical dilemma here?
• Is this an instance of unconscious sexism?
• What would you do if you were the young
woman?
Case Study 10: Start-up
Development Company
• Sexism in the workplace can make for a
very tense and uncomfortable work
environment
• Economic developers should have a
heightened awareness of their language
and behavior as to not engage in any form
of sexist behavior
Case Study 13: Managing
Conflicts of Interest
• Is there a conflict of interest here?
• Was the lawsuit filed by historic preservation
groups appropriate or was it extreme?
• The planning commission member sought legal
counsel before partaking in the vote. What else
could he have done to further avoid the
appearance of a conflict on interest?
Case Study 14: Respecting
Roles and Responsibilities
• Should the manager have remained in
order to hear the comments and perhaps
offer his input?
WORKING WITH VIOLATIONS
Working with Ethics Violations
• Violations can never be eliminated.
• Procedures for review and consequences.
Reviewing Ethical Violations
• Main components of reviewing ethics violations:
– Was there a violation?
– Investigate
– Impose consequences
• Impartiality, written documentation, and an
appeals process.
IEDC Ethics Violations Review
• No official IEDC procedure.
• The training manual includes information
on the procedures that IEDC intends to
adopt.
CONCLUSION
• Key Points:
– Proceed carefully when facing ethical
questions and situations.
– Remember you represent the profession.
– Know and follow the IEDC Code of Ethics.